By Sabrina Escobar

In keeping with the quiet luxury aesthetic that has long defined the brand, Ralph Lauren won't chase flashy financial targets when it lays out the company's growth plan for the next three years at its investor day on Tuesday.

Instead, Ralph Lauren will aim for sustainable, consistent performance as the company cements its status as a top-tier luxury brand.

"I would just really like to think of Ralph Lauren as a blue chip of the industry," says CEO Patrice Louvet, speaking with Barron's ahead of the investor day. "A company that delivers consistently, you understand what they're doing, their strategy is clear, they're executing it with excellence, and they're built for the long term."

A webcast of the company's investor day begins at 10:30 a.m. Eastern time. The stock was down 4.7% in premarket trading ahead of the event.

The company's three-year financial targets reflect its blue-chip ambitions. From fiscal 2025 through fiscal 2028, Ralph Lauren expects revenue to increase at a compound annual growth rate of mid-single digits in constant currency -- a goal executives consider achievable, but "prudent."

Operating margin is expected to expand about 1 percentage point to 1.5 percentage points by fiscal 2028, driven by a combination of gross margin improvements and operating expense leverage. The gains come even as Ralph Lauren expects to spend more on marketing as it looks to get in front of new customers across the globe.

The company plans to return at least $2 billion to shareholders through fiscal 2028.

Shares of Ralph Lauren are up 34% this year and have gained 75% over the past 12 months as of Monday's close, surging on quarter after quarter of strong earnings results and consistent sales growth that has bucked a broader slowdown in luxury spending.

Since taking over as CEO in 2017, Louvet has aimed to reposition Ralph Lauren as a pure-play luxury brand, focusing on cutting down on markdowns, improving product quality, and targeting a new generation of consumers. The company's new strategy is an "evolution" of these choices, Louvet says, focused on expanding Ralph Lauren's core products, scaling internationally, and continuing to elevate and energize the brand.

Reducing the brand's exposure to midtier department stores and off-price channels has also been key to that transition. In fiscal 2017, wholesale represented roughly 42% of Ralph Lauren's total revenue. In its latest fiscal year, wholesale made up just under 31% of total revenue, with many of those sales shifting to Ralph Lauren's direct-to-consumer business.

Wholesale will continue to play a role in Ralph Lauren's business strategy, particularly in international markets, Louvet says. But the company will continue to be selective about which department stores it sells in.

"Quality wholesale has a role to play for us in terms of brand discovery, " Louvet says. "Consumers don't necessarily discover brands through stand-alone stores in terms of scale, right, but I insist on the word 'quality' wholesale, and what we mean by that is an environment where we are proud to have our brand."

The brand still has ample opportunity to grow and gain market share, says Justin Picicci, Ralph Lauren's chief financial officer. Women's apparel and accessories remains an underpenetrated category in the U.S., while the core men's business can keep gaining momentum across Europe and in China.

"There's such a scope and a breadth of opportunity in front of us across many, many different vectors," Picicci says.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 16, 2025 08:59 ET (12:59 GMT)

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